3 Warren Buffett Stocks Moving into the Buy Zone

Warren Buffett is known for his penchant for buying “forever" stocks. The legendary investor has a strategy that may be boring for many investors. That's particularly true in red-hot bull markets. However, when the market takes a tumble, the value found in Buffett stocks comes shining through.  

Still, even Buffett's stocks have not been immune from the recent market sell-off. But that's where the opportunity lies, particularly for these three stocks that are trading at a discount to their 52-week highs, putting them in a sweet spot for value investors.  

Look at What Buffett Does More Than What He Says 

The Kraft Heinz Company NASDAQ: KHC would not be on the list of Buffett's greatest hits. In fact, the billionaire once grumbled that his hedge fund, Berkshire Hathaway (NYSE: BRK.A, NYSE: BRK.B), overpaid for KHC stock. And long-term investors have surely been disappointed with a stock that's been range-bound for the better part of two years.  

However, investors should note that Buffett helped engineer the merger between Heinz and Kraft Foods. And it doesn't appear that Buffett has any intention to abandon his stake in the stock anytime soon.  

Kraft Heinz is in the middle of an aggressive turnaround to improve margins and profits. If the first two quarters of 2023 are any indication, things may be moving in the right direction. The company has posted two consecutive quarters of year-over-year (YOY) revenue and earnings increases. It also reiterated its guidance for single-digit earnings growth for the next 12 months.  

That allows investors to focus on the company's valuation and dividend. KHC stock trades for 11.8x forward earnings. And while the company hasn't increased its dividend in several years, it notably didn't cut the dividend during the pandemic, and it now offers value investors an attractive yield of 4.71%.  

The Definition of a Forever Stock 

The Coca-Cola Company NYSE: KO is one of the most iconic Buffett stocks. His hedge fund owns 400 million shares of KO stock. And Buffett is often seen with a can of the company's beverages in hand.  

Over the past two years, amid sticky inflation, the company has shown the pricing power necessary to keep revenue and earnings moving in a positive direction. Over the next 12 months, the company is projecting single-digit earnings growth.  

But to date, investors have been looking the other way. KO stock is down 10% in 2023 as of this writing. That creates an opportunity, with analysts forecasting an 18% upside for KO stock.  

When looking at stocks to buy and hold, it helps to widen your view. When you look at KO stock, investors can see that the stock has rewarded investors. The 23.4% stock price growth in the past five years may be underwhelming for growth investors. However, that growth is supplemented by a dividend, which yields 3.22%. And Coca-Cola is a dividend king, having now raised its dividend for 62 consecutive years.  

Buffett is Buying When Others Are Selling 

With consumers showing signs of stress and credit card delinquencies on the rise, this is a difficult time to invest in financial stocks in general and stock of credit card issuers in particular. However, it's noteworthy that in early 2023, when investors were fleeing bank stocks, Buffett was buying shares of Capital One Financial Corporation NYSE: COF.  

With interest rates at 40-year highs, it's not surprising that Capital One's earnings are down YOY. However, revenue is increasing as consumers continue to rack up debt. COF stock is down more than 8% in the last three months, which may reflect that risk.  

The company's financials look appealing, with a forward P/E ratio of just 8x earnings. Plus, the company pays a dividend with an attractive 2.46% yield. And analysts give COF stock a consensus price target of $116.28, which would be a gain of over 19% from the stock's current price.